Wholsaling iPhones - California

[jakeglea90]

Hello,

Thanks for anybody who is able to reach out and provide clarification. My company operates in an industry of wholesaling iPhones and other electronics. With wholesaling iPhones comes the responsibility to check and vet the devices to make sure they are legitimate and aren't "blacklisted". You can do this with a series of tools online or via the carriers from whom the devices were purchased.

Devices are blacklisted because of three reasons: they were lost, stolen, or obtained fraudulently through carriers not paid for.

The part that makes this area a little gray and confusing is the fact that anybody can misplace their device, report it to their carrier to blacklist it, then find it later and resell the device. Using a tool like checkmend.com that communicates directly with government databases on stolen property they are able to offer an expansive report on the device that would uncover any police reports attached to it.

If we were to purchase blacklisted devices that after running through checkmend.com say there are no police reports attached and only show that it was blacklisted through the carrier, could we be opening ourselves up to any civil or criminal liabilities? If using checkmend and identifying that there are no police reports attached would this help in being our "due diligence"?

Some big box names like Gamestop via their wholesale.gamestop.com website have in their fineprint that all the devices are ran through this checkmend tool:

"CheckMEND has been run on all units to ensure product has not been reported stolen. The IMEI/ESN's are not tested for network activation eligibility. Units may or may not be eligible to be activated or unlocked from a particular network. Product is sold "as is" and returns for IMEI/ESN reasons will not be accepted."

Thank you all for your help regarding this, it's been quite a confusing and gray area of this industry.

 

[quincy]

Yes, you could be sued or charged criminally if you sell stolen or counterfeit goods.

How successful any action taken against you would be is anyone's guess.

 

[NeilTheCop]

The powers that be take a dim view on people trading counterfeit electronics
https://www.ice.gov/news/releases/las-vegas-business-owner-pleads-guilty-trafficking-more-1m-counterfeit-electronics

 

[quincy]

... My company operates in an industry of wholesaling iPhones and other electronics ... could we be opening ourselves up to any civil or criminal liabilities? ... it's been quite a confusing and gray area of this industry.

In other words, it is not really all that "gray" an area.

 

[jakeglea90]

We've always run the appropriate checks and made sure all the devices we purchase and resell are clean, so I guess the other end of this question would be what if the devices we purchase that are clean end up becoming blacklisted later on down the road? Is there any liability at that point, or would the report showing it's clean and not blacklisted be enough to cover our bases that we did our "due diligence"?

 

[jakeglea90]

The powers that be take a dim view on people trading counterfeit electronics
https://www.ice.gov/news/releases/las-vegas-business-owner-pleads-guilty-trafficking-more-1m-counterfeit-electronics

It seems as though this company was importing illegitimate devices or replacement parts and reselling the devices as new. My question is if the carrier says something is blacklisted on their network, is that considered to now be stolen merchandise or would it have to have some sort of police report or theft report tied to it?

 

[quincy]

We've always run the appropriate checks and made sure all the devices we purchase and resell are clean, so I guess the other end of this question would be what if the devices we purchase that are clean end up becoming blacklisted later on down the road? Is there any liability at that point, or would the report showing it's clean and not blacklisted be enough to cover our bases that we did our "due diligence"?

Nothing will protect you from a lawsuit or a criminal charge, if what you are marketing turns out to be stolen goods or counterfeit goods.

You should take every precaution to best ensure what you are selling is legal to sell (e.g., know who you are doing business with) - and keep good records of all transactions.

And hire an attorney to help you should you find yourself in legal hotwater.

 

[jakeglea90]

Nothing will protect you from a lawsuit or a criminal charge, if what you are marketing turns out to be stolen goods or counterfeit goods.

You should take every precaution to best ensure what you are selling is legal to sell (e.g., know who you are doing business with) - and keep good records of all transactions.

And hire an attorney to help you should you find yourself in legal hotwater.

We purchase from other companies and always have invoices and serial numbers on every invoice. We have always turned down devices that are blacklisted because it is such a gray area even though there is money to be made. These devices can be resold or used as parts even if they can't be connected to the carriers.

 

[jakeglea90]

This more than anything is the question that needs answered. If the carrier and report says something is blacklisted on their network, is that enough to now be considered stolen merchandise or would it have to have some sort of police report or theft report tied to it?

 

[quincy]

This more than anything is the question that needs answered. If the carrier and report says something is blacklisted on their network, is that enough to now be considered stolen merchandise or would it have to have some sort of police report or theft report tied to it?

There does not have to be a police report. There is often no police report connected to counterfeit goods.

 

[jakeglea90]

There does not have to be a police report. There is often no police report connected to counterfeit goods.

These aren't counterfeit (fake) if that is what is implied, they're just blacklisted by the carrier.

Thanks again for all of the help, really do appreciate it.

 

[quincy]

These aren't counterfeit (fake) if that is what is implied, they're just blacklisted by the carrier.

Thanks again for all of the help, really do appreciate it.

I recommend you avoid all blacklisted goods and companies. Know those from whom you are purchasing your goods. Keep good records of all transactions. And hope for the best.

Good luck.

 

[jakeglea90]

I recommend you avoid all blacklisted goods and companies. Know those from whom you are purchasing your goods. Keep good records of all transactions. And hope for the best.

Good luck.

Thank you, real quick though, on the checkmend reports it has an "X" where carrier blacklist is, but when it comes to the "Lost" or "Stolen" reports there's a checkmark that means free and clear. If this is the report that police and government agencies use, would that tell them whether or not there is a loss or theft report attached to it, and would that be the part of the report they are looking at?

 

[quincy]

Thank you, real quick though, on the checkmend reports it has an "X" where carrier blacklist is, but when it comes to the "Lost" or "Stolen" reports there's a checkmark that means free and clear. If this is the report that police and government agencies use, would that tell them whether or not there is a loss or theft report attached to it, and would that be the part of the report they are looking at?

I know nothing about the company whose reports you apparently are relying on. Sorry.